In my yesterday’s article, I did an intraday trading analysis of EUR/CAD. You can check it out here if you missed it:
Today’s example will be a bit similar as there will also be Price Action and Volume Profile confluences.
EUR/USD – Recent development
Let’s get to it and have a look at what happened on the EUR/USD yesterday.
The most important thing on EUR/USD yesterday was a strong buying activity/uptrend which started in the EU session.
When there is an uptrend like this, I am always interested in how the volumes were distributed within the trend area.
What I look for are significant and nicely visible Volume Clusters.
In this case, there was a nice Volume Cluster created in the middle of yesterday’s uptrend.
A Volume Cluster which is created within an uptrend tells us, that there were buyers adding to their Long positions there. Those are the volumes we see in the Volume Cluster.
From that place the buyers pushed the price further up.
What happens when there is a pullback to this Volume Cluster area at some point in the future?
There is a solid chance that the buyers who entered their Longs there will become active again and they will defend this area.
As a result, that should push the price upwards again (it will work as a Support).
Check it out in the 30 Minute EUR/USD chart below:
Recommended Forex Broker
Price Action setup
There is also one more thing I wanted to show you about this Support. It is the same Price Action setup I talked about in my article yesterday.
The basic logic behind this setup is that a breached Resistance becomes a Support (and vice versa).
The picture below shows the same chart, only with 60 Minute time frame and it’s little bit zoomed out.
What I marked there for you are two strong selling reactions to the 1.1376 area I spoke of earlier.
Those two reactions tell us that this area worked as a strong Resistance in the past. For this reason, when this Resistance got breached yesterday, it became a Support.
This is quite an old (but working) Price Action setup which I like to use.
I hope you guys liked today’s analysis. Let me know what you think in the comments below.